Is your farm business natural disaster-proof

Agricultural production is beyond a business; it is the backbone of the economic sustenance of most countries, as it is crucial to bolstering productivity by meeting the nutritional requirements of the citizenry; a tool to ending poverty through shared prosperity and employment generation.

In Nigeria, agriculture is a growing industry, contributing about 26.09% of the nation’s Gross Domestic Product (GDP). The sector is also the largest direct employer of labour, responsible for 36% of the total labour force. Despite these positive contributions, the agricultural value chains ecosystem remains fraught with challenges.

These challenges include lack of transportation infrastructure, lack of market access, and unavailability of funds, lack of ultra-modern equipment, extreme weather changes and natural disasters.

Every year natural disasters such as floods, hurricanes, fires, earthquakes, and drought harm agricultural production, this is so because agricultural production value chain relies on weather elements, climate, and water availability to thrive.

According to the Food and Agriculture Organisation of the United Nations, “In developing countries, the agriculture sector absorbs about 22 per cent of the total damage and losses caused by natural hazards. Similarly, a report by SBMIntel, an Africa focused research firm, stated that “nearly 80% of Nigerian farmers were estimated to have been affected by the ravaging effects of flooding and drought in 2020.” The report also revealed that the harvest of 26.3 per cent of Nigerian farmers was greatly affected by extreme weather conditions mostly attributable to climate change and global warming.

The weather forecast for 2021 projects that Nigeria is to experience a rainy season of 238-261days. Following the recent rainfalls and flooding resulting in losses for individuals and organisations, farmers are also not left unscathed.

These activities, reports and projections indicate that just like every other business, agriculture is risk-prone due to both environmental and financial challenges. In mitigating these losses, it is crucial to ask if your agriculture production business is natural disaster-proof. Should the predicted extreme rainfall or other forms of natural disasters occur, can you recover from the subsequent financial losses? These questions are not to instigate fear or panic but sensitize Agric business owners involved in the upstream (production) sector of agricultural production to action towards a recovery plan should the unexpected happen.

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In this edition, we highlight simple action points farmers can take to help steer the course of their answers towards a positive direction.

1. Have a farm flood plan: As popularly said and found to be accurate, “Prevention is better than cure”. This plan should be a combination of mitigation and adaptation measures. Hence the first action is to have a plan that limits the effect of floods on your farm. An actionable farm flood plan should cover the land or fields, stock, machinery, tools, chemicals, fuels, and the workers. You can start by identifying portions of lands or fields on higher ground to move the stock or produce to prevent loss or damage. Also, please take note of chemicals or fuels on the farm that can contaminate floodwater and think of the best safe place to relocate them. The plan must also include interventions that reduce vulnerability to flooding, mainly by providing flood warning systems, guidance on enhanced flood resilience and the creation of wash land and wetlands. It is also critical to carry your staff along on the procedures to take if flooding occurs.

2. Get insurance as a contingency plan: Researchers and thought leaders in the agricultural sector have advised and encouraged farmers to have an insurance policy for their farm investments against unforeseen disasters. Despite this call, it is alarming to note that only “less than five per cent of farmers have access to agricultural insurance”. Some analysts strongly believe that many farmers do not consider insurance let alone embrace it.

Undoubtedly, deepening insurance penetration in Nigeria is an enormous task, one which Leadway Assurance, Nigeria’s leading insurer, has been committed to over the last decade. With sector and risk-specific products, such as the Leadway Agric Insurance targeted at crops, livestock, equipment, coverage against losses from fire, flood, burglary, explosion, there is no gainsaying that Leadway is poised to make farming an endeavour that bears peace of mind.

No Agric investor in the production value chain can resist a policy that guarantees your business compensation to recover your investment or replace damaged equipment lost to a natural disaster or other perils. So, Leadway is assuring an insured farmer that should you suffer any loss on your crops, livestock or other investments, they are there to be your succour and backbone to recovery. Such comprehensive assurance helps an affected farmer plan better for the next season instead of mulling over the losses incurred.